Report of Foreign Issuer (6-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2019

Commission File Number: 001-31994

Semiconductor Manufacturing International Corporation

(Translation of registrant’s name into English)

18 Zhangjiang Road

Pudong New Area, Shanghai 201203

People’s Republic of China

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

☒  Form 20-F    ☐  Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

☐  Yes    ☒  No

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		Semiconductor Manufacturing International Corporation
Date: May 15, 2019		By:	/s/ Dr. Gao Yonggang
			Name:	Dr. Gao Yonggang
			Title:	Executive Director, Chief Financial Officer and Joint Company Secretary

 

 

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Hong Kong Exchanges and Clearing Limited and The  Stock   Exchange   of   Hong  Kong   Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

 

SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

中 芯 國 際 集 成 電 路 製 造 有 限 公 司 *

(incorporated in the Cayman Islands with limited liability)

(Stock  Code: 981)

 

CONTINUING CONNECTED TRANSACTIONS

IN RELATION TO NSI FRAMEWORK AGREEMENT

NSI FRAMEWORK AGREEMENT

 

The Company announces that on 15 May 2019, the Company and NSI entered into the NSI Framework Agreement in relation to the supply of goods, rendering of or receiving services, leasing of assets, transfer of assets and provision of technical authorisation or licensing. The NSI Framework Agreement has a term of three years commenced on 1 January 2019 and ending on 31 December 2021.

 

LISTING RULES IMPLICATIONS

 

As at the date of this announcement, China IC Fund holds approximately 15.78% interest in the Company through its wholly-owned subsidiary, Xinxin (Hongkong) Capital Co., Limited. Accordingly, it is a connected person of the Company at the issuer level under the Listing Rules. As at the date of this announcement, the registered capital of NSI is held as to approximately 38.57% and 32.97% by the Group and China IC Fund , respectively . NSI is therefore a n associate of China IC Fund as defined under rule 14A.13 of the Listing Rules and thus a connected person of the Company under the Listing Rules.

 

As one or more of the applicable percentage ratios (other than the profits ratio) in respect of each of the Annual Caps are more than 0.1% and less than 5%, the transactions contemplated under the NSI Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules and are subject to the reporting, announcement and annual review requirements but exempt from the Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

 

 

 

 

 

 

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NSI FRAMEWORK AGREEMENT

 

The Company announces that on 15 May 2019, the Company and NSI entered into the NSI Framework Agreement in relation to supply of goods, rendering of or receiving services, leasing of assets, transfer of assets, provision of technical authorisation or licensing. The NSI Framework Agreement has a term of three years commenced on 1 January 2019 and ending on 31 December 2021.

 

Summary of Principal Terms of the NSI Framework Agreement

 

D ate: 15 May 2019

 

Effective period:

Commenced on 1 January 2019 and ending on 31 December 2021. Two months before the expiry date of the NSI Framework Agreement, the parties will consider whether to renew the NSI Framework Agreement.

 

Parties: (i) the Company on behalf of itself and its subsidiaries; and

 

(ii) NSI.

 

Continuing Connected Transactions

 

The Continuing Connected Transactions set out in the NSI Framework Agreement will include the following:

 

1.

Type I CCT: purchase and sale of spare parts, raw materials, photomasks and finished products;

 

2.

Type II CCT: rendering of or receiving services, including, without limitation, (a) processing  and   testing service; (b) procurement service; (c) research, development and experiment support service; (d) comprehensive, logistics, production management and IT service; and (e) water, electricity, gas and heat provision service;

 

3.

Type III CCT: leasing of assets, such as plant and office premises;

 

4.

Type IV CCT: transfer of assets; and

 

5.

Type V CCT: provision of technical authorisation or licensing by the Company to NSI.

 

 

Pricing

 

The price of the Continuing Connected Transactions will be determined in accordance with the following general principles (in ascending order):

 

(1)

the price prescribed or approved by state or local price control department (if any);

 

(2)

a reasonable price in accordance with the industry guided price (if any);

 

(3)

the comparable local market price which shall be determined after arm’s length negotiations between both parties with reference to (a) the market price charged by independent third parties for comparable product or services at the same time and in the same region; and (b) the lowest quotation that the purchaser can obtain by way of public tender through equalization calculation;

 

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(4)

where there is no comparable local market price, the price based on the principle of cost plus a fair and reasonable profit rate, being the aggregate sum of (a) the actual reasonable cost, which is the standard cost of last quarter for the production fab; and (b) a fair and reasonable profit rate; or

 

(5)

where none of the above general pricing principles are applicable, the price determined by other reasonable means as agreed upon by both parties on the condition that the relevant costs are identifiable and are allocated to each party involved on a fair and equitable basis.

 

Where general pricing principles (2) to (5) apply, to the extent possible, each of the Company and NSI will obtain at least two quotations or tenders from independent third parties before agreeing upon the applicable price.

 

As to the price prescribed by the state or local price control department, state-prescribed fees apply to water and electricity, which are relevant to the cost of such services and are determined by prices published from time by time by the relevant PRC government authority. Under the Pricing Law of the PRC, the PRC government may implement a state-prescribed or guidance price for specific goods and services if necessary, and such price will be promulgated in accordance with the requirements of relevant laws, regulations or administrative rules from time to time. If any state-prescribed price or guidance price becomes available to the Continuing Connected Transactions in the future, the parties will execute such price first in accordance with pricing principle (1) above.

 

Based on the above general principles and the actual circumstances when entering into the NSI Framework Agreement, the parties further agree to the following specific pricing policies for the Continuing Connected Transactions. If any particular Continuing Connected Transaction is not covered by the following policies, or any of the following policies is no longer applicable, the parties will use the above general principles to determine the price for the relevant transaction.

 

Types of Continuing Connected

Transactions Pricing policy

 

I.

Type I CCT

 

1. Mutual purchase and sale of spare parts	The market price of spare parts, with the relevant transportation fees borne by the purchaser, with reference to market price (see general pricing principle (3) above)
2. Mutual purchase and sale of raw materials	The market price of raw materials, with the relevant transportation fees borne by the purchaser, with reference to market price (see general pricing principle (3) above)
3. Purchase of photomasks by NSI from the Company	With reference to market price (see general pricing principle (3) above)
4. Sales of finished products by the Company to NSI	With reference to market price (see general pricing principle (3) above)

 

 

 

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Types of Continuing Connected

Transactions Pricing policy

 

II.

Type II CCT

 

 

1.

Mutual rendering of processing and testing service due to the Company and NSI’s production capacity limits of certain types of products

With reference to market price (see general pricing principle (3) above)

 

 

 

2.

Rendering of procurement services by the Company to NSI

Cost plus a fair and reasonable profit rate in line with the industry (see general pricing principle (4) above), based on allocation of procurement department expenses according to working hours or workload plus a subsequent profit rate of 5%

 

 

 

3.

Provision of research, development and experiment support services by the Company to NSI

With reference to market price (see general pricing principle (3) above)

 

 

 

4.

Rendering of comprehensive administration, logistics, production management and IT services by the Company to NSI

Cost plus a fair and reasonable profit rate in line with the industry (see general pricing principle (4) above), based on allocation of labour cost and relevant resources consumption according to the proportion of working hours or workload plus a subsequent profit rate of 5%, or with reference to market price provided by independent third parties

 

 

 

5.

Provision of water, electricity, gas and heat by the Company to NSI

The price prescribed or approved by state or local price control department (if any) (see general pricing principle (1) above) or with reference to market price (see general pricing principle (3) above)

 

 

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Types of Continuing Connected

Transactions Pricing policy

 

III.

Type III CCT

 

 

1.

Leasing of plant and office by the Company to NSI

With reference to market price (see general pricing principle (3) above)

 

 

IV.

Type IV CCT